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Performance Highlights / Performance Forecast

直近の業績と業績見通しについて、説明しています。
詳細は、決算短信をご参照ください。For details, please refer to Consolidated Quarterly Financial Results (Japanese Accounting Standards) for the First Three Quarters of the Fiscal Year Ending December 31, 2023.

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Consolidated performance highlights

(December 2022)

Unit: million yen

Net sales Operating profit Ordinary profit Profit attributable to
owners of parent
2022年12月期 315,927 6,865 7,906 9,308
Growth rate (%) 9.7 -47.2 -48.8 -1.9
2021年12月期 287,989 13,005 15,442 9,492

During the fiscal year ended March 31, 2019, the world economy progressed to a new stage of the pandemic and showed some signs of gradual recovery. In addition to persistently high energy prices and supply constraints, there was also a downturn in the economy and sharp fluctuations in foreign exchange rates due to global monetary tightening. Additionally, the display industry, one of our major markets, has seen rapid inventory adjustments, which has had a very severe impact on our corporate group's activities.

In this environment, our corporate group has conducted its business activities based on the following three management policies.

Regarding the first policy, "strengthening the profitability of business," we are trying to reduce the impact of an overall demand slowdown due to a rebound from the special coronavirus demand in the display market, a slump in the automobile market due to semiconductor shortages, and confusion caused by coronavirus policies in China. However, in the Chinese market, we strengthened our sales network to cultivate customers for color filter materials for LCD displays, and in India and the United States, where we expanded our facilities, we expanded our pressure sensitive adhesives business. Additionally, in Europe, we have started local production of inkjet ink for digital printing, where demand is expected to increase. Meanwhile, in Japan, we worked to reform our profit structure, transferring the functions of the Mobara Plant to the Fuji Factory to improve production efficiency in the color materials and functional materials business, and transferring the sales structure of the printing and information business to TOYO INK CO., LTD. We proceeded with streamlining, including integrating the Furthermore, although there were delays in responding to the soaring prices of raw materials, energy, and logistics costs, we continued to revise prices and promote cost reductions.

With regard to the second policy, "Creation and Expansion of Priority Development Areas," we continued our activities in the three focus areas. In the area of sustainability science, we continued our efforts in the four major markets for automotive lithium-ion battery materials (Europe, the United States, China, and Japan), and in addition to full-scale production in Europe and the United States, we also developed new customers in China and Japan. environmentally-friendlyIn terms of products, we focused on expanding sales of functional coating materials that contribute to the conversion of packaging to paper and developing colorant products that contribute to recycling. In the area of communication science, we have opened a technology center in Shenzhen, China, to accelerate the development of new polymer materials for electronics and 5G applications. In the Life Sciences domain, with a view to future business development in the growing biopharmaceutical field, we reached a basic agreement with Nobelpharma Co., Ltd. on a business alliance related to manufacturing, development, and overseas expansion, and also proceeded with the construction of a new plant to expand the number of transdermal patches. In addition, for cutting-edge research related to these priority development areas, we have established the Toyo Ink Group Collaborative Research Center within the Tokyo Institute of Technology.

Regarding the third policy, "Improving the value of management resources for sustainable growth," we will promote DX (digital transformation) of our business infrastructure, utilize MI (materials informatics) in product development, We have advanced concrete measures such as data visualization towards the creation of a smart factory. From an ESG perspective, we promoted the sustainability vision "TSV2050/2030" and disclosed climate change information based on the TCFD recommendations. In addition, we have created an environment that promotes diversity, including the establishment of "Guidelines for Deepening and Supporting LGBT People," and in terms of governance, we have transitioned to a company with Audit and Supervisory Committee to strengthen the supervisory function of Board of Directors I did. Additionally, we actively worked to reduce cross-shareholdings and improve capital efficiency.

As a result of the above, sales for the current consolidated fiscal year increased to 315,927 million yen (up 9.7% from the previous fiscal year), but operating income increased to 6,865 million yen (up 9.7% from the previous fiscal year). (down 47.2% from the previous fiscal year), ordinary income decreased to 7,906 million yen (down 48.8% from the previous fiscal year), and net income attributable to owners of parent decreased to 9,308 million yen (down 1.9% from the previous fiscal year). became.

Furthermore, with the application of "Accounting Standards for Revenue Recognition" (Corporate Accounting Standards No. 29, March 31, 2020; hereinafter referred to as "Revenue Recognition Accounting Standards"), sales have increased by 400 million yen compared to the previous method. Operating income decreased by 25 million yen, operating income decreased by 41 million yen, and ordinary income decreased by 1 million yen.

During the fiscal year under review, the global economy was affected by high raw materials and energy prices and supply constraints chiefly due to the prolonged state of affairs in Ukraine and restrictions on economic activities in China. In addition, there were economic slowdowns and violent exchange rate fluctuations due to worldwide monetary tightening. Meanwhile, the COVID-19 pandemic was entering a new phase in which people live with COVID-19, and there were signs of a recovery in the global economy. In the display industry, one of the main markets of the Toyo Ink Group, inventory adjustments progressed rapidly, which had significant adverse effects on the Group's corporate activities.
Amid this business environment, the Toyo Ink Group operated its business activities in line with the following three management policies.
The first policy is to strengthen the profitability of businesses. The Group was affected by the slowdown of demand across the board, reflecting a downturn following special demand in the display industry due to COVID-19, a slowdown in the automobile market due to the shortage of semiconductors, and confusion caused by COVID-19 policy in China. In response, the Group strengthened its sales network in the Chinese market to acquire new customers for its materials of color filters for LCDs. In India and the United States, the Group expanded the pressure sensitive adhesives business by expanding facilities. In Europe, the Group started the local production of inkjet inks for digital printing, for which demand is expected to expand. In Japan, the Group strove to change its profit structure and moved forward with streamlining. The Group transferred functions of the Mobara Plant to the Fuji Factory to enhance production efficiency in the Colorants and Functional Materials Related Business. The sales system in the Printing and Information Related Business was integrated into TOYO INK Co., Ltd. The Group continually revised prices and reduced costs, although it was slow to respond to rising raw materials and energy prices and surging logistics costs. Under its second policy, creating and expanding priority development domains, the Group continued to implement business activities in the three priority domains below. In Sustainability Science, the Group continued its business activities in the four largest automobile markets for automobile lithium-ion battery materials (Europe, the US, China and Japan). In Europe and the United States, production started in earnest. In China and Japan, new customers were acquired. Regarding environmentally friendly products, the Group focused on expanding sales of functional coatings that contribute to the manufacturing of paper packaging materials and developing plastic colorant products that contribute to recycling. In Communication Science, the Group established a Technical Center in Shenzhen, China to establish a system for expediting the development of new polymer materials for electronics and 5G applications. In Life Science, the Group reached a basic agreement with Nobelpharma Co., Ltd. on a business alliance related to manufacturing, development and overseas operations in consideration of future business expansion into the growing biopharmaceutical field and started to build a new factory to expand the patch-type pharmaceuticals business. Regarding advanced research related to these priority development domains, the Group established a Toyo Ink Group Collaborative Research Center within the Tokyo Institute of Technology.
The third policy is to enhance the value of management resources for sustainable growth. The Group implemented the digital transformation (DX) of its business foundation and took specific steps, including the use of material informatics(MI) in the product development and data visualization for the creation of smart factories. On the ESG front, the Group implemented initiatives to achieve its sustainability vision, TSV2050/2030, and disclosed climate change information based on the TCFD recommendations. The Group developed an environment for increasing diversity and established guidelines for deepening the understanding of LGBT people and supporting them. On the governance front, the Groupchanged to a company with an audit and supervisory committee to enhance the supervisory functions of the Board of Directors. The Group actively reduced its cross-shareholdings to improve capital efficiency.
As a result, net sales for the fiscal year under review rose to 315,927 million yen (up 9.7% year on year). However, profit fell partly due to surges in raw materials prices. Operating profit stood at 6,865 million yen (down 47.2% year on year) and ordinary profit came to 7,906 million yen (down 48.8% year on year). Profit attributable to owners of parent was 9,308 million yen (down 1.9% year on year).
Due to the application of the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020), etc., net sales were 425 million yen less, and operating profit and ordinary profit were 41 million yen and 1 million yen less each, compared with values calculated by applying the previous method.

Earnings forecast

(December 2023)

Announced on November 10, 2023

Unit: million yen

Consolidated net sales Consolidated operating profit Consolidated ordinary profit Profit attributable to 
owners of parent
Fiscal year ending December 2023 (forecast)
Forecast announced on February 14, 2023 (A)
330,000 11,000 9,500 6,000
Fiscal year ending December 2023 (forecast)
Revised forecast announced on November 10, 2023 (B)
320,000 12,000 12,500 8,000
Increase/decrease amount (B-A) -10,000 1,000 3,000 2,000
Rate of change(%) -3.0 9.1 31.6 33.3
(Reference) Fiscal year ending December 2022 315,927 6,865 7,906 9,308

On November 10, 2023, we have revised the full-year consolidated performance forecast for the fiscal year ending December 2023 (January 1, 2023 to December 31, 2023) that was announced on February 14, 2023.

During the first three quarters of the fiscal year ending December 31, 2023, the global economy was recovering slowly due to improvements in the employment and income environment and the effects of various policies, but consumers refrained from purchasing due to rising prices. The outlook remains uncertain, as energy prices continue to remain high due to the prolonged situation in Ukraine.
Regarding the business environment of our corporate group, sales volume was sluggish in the first half due to the LCD panel market, electronics market, and stagnation in the Chinese market, and although there was a recovery trend in the second half, it was not enough to make up for the first half, so sales decreased. is expected to be lower than originally planned.
On the other hand, in response to the soaring prices of raw materials and energy, we are making progress in reducing costs through business structure improvements and revising selling prices, and profits are improving. In addition, taking into account the impact of foreign exchange gains resulting from the depreciation of the yen and the appreciation of foreign currencies, profits are expected to exceed the initial plan.
As a result of the above, the full-year consolidated performance forecast for the fiscal year ending December 2023 has been revised from the figures announced on February 14, 2023.

(Note) The above forecasts are based on information available as of the date of publication of this material, and actual results may differ from the forecast numbers due to various factors.

In the first three quarters of the consolidated fiscal year under review, the global economy recovered modestly, bolstered by various policies amid improvement in the employment and income situation; however, the outlook remains uncertain, with consumers pulling back on spending because of higher prices and energy prices remaining stubbornly high due to the protracted Ukraine conflict.
In this operating environment, the Group expects to post net sales below the initial targets given sluggish sales volume growth in the first half of the year due to weakness in the LCD panel market, electronics market, and Chinese market. Although a recovery was seen in the second half of the year, it was not sufficient to offset the first half.
However, profit is continuing to improve thanks to progress in cost cutting and sales price revisions through business structure improvement and other initiatives to respond to soaring prices of raw materials, energy, and other items. After factoring in the impact of foreign exchange gains arising from the depreciation of the yen, profits are expected to exceed the initial targets.
Due to the above, the Group has thus changed the full-year consolidated results forecast for the fiscal year ending December 31, 2023 that was announced on February 14, 2023. For details, please refer to the ”Notice Concerning Revisions to Full-Year Consolidated Financial Results Forecasts” announced on November 10, 2023.

Note: The above forecasts are based on the information available on the date this material is released. Actual results could differ materially from these forecasts due to various factors in the future.